service project
DESCRIPTION
useful for MBA AND Management student'sTRANSCRIPT
7 P’S OF SERVICE PROJECT
Successful marketing depends
Upon addressing a number of keyIssues. These include: what acompany is going to produce; howmuch it is going to charge; how it isgoing to deliver its products orservices to the customer; and how it isgoing to tell its customers about itsproducts and services. Traditionally, these considerationswere known as the 4Ps — Product,Price, Place and Promotion. Asmarketing became a moresophisticated discipline, a fifth ‘P’ wasadded — People. And recently, twofurther ‘P’s were added, mainly forservice industries — Process andPhysical evidence. These considerations are now knownas the 7Ps of marketing, sometimesreferred to as the marketing mix.Product
PRESENTATION MADE BY
Priya-
Krutika-
Sameer-
Iqukhlakh-
ACKNOWLEDGMENT
We would like to express our special thanks of gratitude to our prof. Mr. Gautam Chitnis
who gave us the golden opportunity to do this wonderful project on the topic 7 p’s of
service marketing mix, which also helped us in doing a lot of research and we came to
know about so many new things we are really thankful to them.
Secondly we would also like to thank our friends who helped us in finalizing this project
within the limited time frame.
INTRODUCTION
What is service?
A service is any activity or benefit that one party can offer to another that is intangible in
nature to fulfill their wants and needs.
“Services are activities, benefits, or satisfactions which are offered for
sale, or provided in connection with sale of goods.”
- American Marketing Association (1960)
Features of service1) Intangible
2) Inseparable
3) Heterogeneous
4) Perishable
WHAT IS SERVICE MARKETING?
Services marketing is a sub field of marketing which covers the marketing of both
goods and services.
Goods marketing includes the marketing of fast moving consumer goods (FMCG)
and durables.
Services marketing typically refers to the marketing of both business to consumer
(B2C) and business to business (B2B) services.
Common examples of service marketing are found in telecommunications, air
travel, health care, financial services, all types of hospitality services, car rental
services, and professional services.
WHAT IS SERVICE MARKETING MIX?
The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 P’s as compared to the 4 P’s of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more P’s which are required for optimum service delivery.
The product marketing mix consists of the 4 P’s which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix – the 4 P’s.
The extended service marketing mix places 3 further P’s which include People, Process and Physical evidence. All of these factors are necessary for optimum service delivery.
7 P’S OF SERVICE MARKETING
In the previous page we discussed the characteristics of a service. In this project we look at how the marketing mix for marketing a service is different to the marketing mix for products. Just like the marketing mix of a product the service marketing mix comprises of Product, Price, Place and Promotion. However as a service is not tangible the marketing mix for a service has three additional elements: People, Process and Physical Evidence.
The first four elements in the services marketing mix are the same as those in the traditional marketing mix. However, given the unique nature of services, the implications of these are slightly different in case of services.
1. Product: In case of services, the ‘product’ is intangible, heterogeneous and perishable. Moreover, its production and consumption are inseparable. Hence, there is scope for customizing the offering as per customer requirements and the actual customer encounter therefore assumes particular significance. However, too much customization would compromise the standard delivery of the service and adversely affect its quality. Hence particular care has to be taken in designing the service offering.
For example- The main product of a hotel are
Food and Beverage Rooms Conference room(Meeting rooms/ Conference rooms/ Board rooms) Restaurants & Bars SPA & Swimming pool Ambulance etc.
2. Pricing: Pricing in case of services is rather more difficult than in case of
products. If you were a restaurant owner, you can price people only for the food you are serving. But then who will pay for the nice ambience you have built up for your customers? Who will pay for the band you have for music? Thus these elements have to be taken into consideration while costing. Generally service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit mark up you get your final service pricing. Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in case of services attendant costs - such as labor and overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambience provided. The final price for the service is then arrived at by including a mark-up for an adequate profit margin. In services there is no variable cost since services are not manufactured but delivered. The service prices heavily depends on reputation and goodwill of the service provider. The service pricing differs place to place.
For example- The prices are being charged according to facilities provide by a
hotel. The charges vary from Hotel to Hotel. Pricing is the only mix which
generates a turnover for the organization.
3. Place: Place in case of services determine where the service product is going to be located. The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area. Since service delivery is concurrent with its production and cannot be stored or transported, the location of the service product assumes importance. Service providers have to give special thought to where the service would be provided. Thus, a fine dine restaurant is better located in a busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is better situated in the countryside away from the rush and noise of a city.
For example- Metropolitan cities, Near Sea, Near Tourist place Etc.
Panoramic Sea Resort is located on Beach Road in Alleppey about 4 km from the main Alleppey city. The nearest airport is Cochin international airport, which is about 95 kilometres away and the Alleppey railway station is just 2 kilometres away from the hotel. Another major railway station in Kochi is located at a distance of 60 km from the resort.
Nearby tourist locations to visit from Lake Haven Island Resorts Alleppey: Kuttanad, Pathiramanal, Karumadikkutan temple, Mannarasala temple,
Mararikkulam, Punnapra, Ambalapuzha Temple, Krishnapuram Palace, Alleppey Beach, Arthunkal Church, St George Church Edathua, Chavara Bhavan, Chettikulangara Devi temple
4. Promotion: Since a service offering can be easily replicated promotion becomes crucial in differentiating a service offering in the mind of the consumer. Thus, service providers offering identical services such as airlines or banks and insurance companies invest heavily in advertising their services. This is crucial in attracting customers in a segment where the services providers have nearly identical offerings.
For example- here, personal selling occupies a place of significance in the hotel industry. A hotel receptionist plays the role of a salesman not only for selling the accommodations but for the entire establishment. The nerve center of a hotel is the receptionist. An efficient receptionist must give equal importance to internal selling. He should possess an impressive personality, ambitious, enthusiastic, and respectful to the guest. Even travel agent help in promoting the hotel business. T.V, Newspapers, Internet also help in promoting the hotel business.
We now look at the 3 new elements of the services marketing mix - people, process and physical evidence - which are unique to the marketing of services.
People: People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff. The same is true of banks and department stores. Consequently, customer service training for staff has become a top priority for many organizations today. In all P’s this is most important P because service cannot be separated from service provider. In commercial services like Banking, Insurance, Airlines, Hotels etc. are at two levels with the service organization.
Front Office Staff Back office staff
The front office staff is called as a contact staff while back office staff called as support staff. They normally related to customer services executives i.e. Cook in a restaurant. Basically service staff are who visible to the service consumer front office staff, i.e. Waiter, Receptionist etc. Service consumer evaluates the service quality on the way the front office staff behaves. Back office staff are the actual service provider i.e. cook etc. the service quality actually depends on the back office staff therefore both Front office and Back office staff are critically important for delivering the service. A front office should never commits what cannot delivered. And back office must always delivers what has been committed. And the line that divides back office and front office staff is called as line of visibility. It is an invisible line which divides contact personnel from support personnel. The Front office is the nerve center of a hotel. Members of the front-office staff welcome the guests, carry their luggage, and help them register, give them their room keys and mail, answer questions about the activities in the hotel and surrounding area, and finally check them out. In fact, the only direct contact most guests have with hotel employees, other than in the restaurants, is with members of the front-office staff. The front office functions can be divided into five general areas:
For example-front office staff for hotel are-.1 Receptionist 2. Bell service 3. Mail and information 4.Waiters 5. Cashiers and night auditors.
Back office staff for hotel are- Cooks etc.
Process: The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Therefore, most companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff. The process is concerned with the ways in which service provided to the service receiver.
Welcome the guests,
carry their luggage,
help them register,
give them their room keys and
mail if any
answer questions about the
activities in the hotel
finally check them out.
Physical Evidence: Generally a service transaction involves the interaction of the service provider with the customer in a service environment. Services like hotels services and hospitals are delivered in physical environment created by the service firm. Physical evidence is termed as the social environment along with the tangibles cues. Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. Thus, there are hair salons that have well designed waiting areas often with magazines and plush sofas for patrons to read and relax while they await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests. The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service.
Take an example of a Hotels which has only chairs and tables and good food, or a Hotel which has ambient lighting, nice music along with good seating arrangement and this also serves good food. Which one will you prefer? The one with the nice ambience. That’s physical evidence. Several times, physical evidence is used as a differentiator in service marketing. Imagine a private hospital and a government hospital. A private hospital will have plush offices and well-dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a differentiator.
SUMMARY
The Service Marketing Mix involves Product, Price, Place, Promotion, People, Process and Physical Evidence. Firms marketing a service need to get each of these elements correct. The marketing mix for a service has additional elements because the characteristics of a service are different to the characteristics of a product. The Characteristics of a service are:
(1) Intangibility (2) Inseparability (3) Perishability (4) Heterogeneity.
To certain extent managing services are more complicated then managing products, products can be standardised, to standardise a service is more difficult as there it can be affected by factors outside the service providers control.
CONCLUSION
Service Marketing mix analysis is a fundamental step towards effective strategy.
Where other analysis are more related to environment and feasibility analysis,
The 4 Ps of marketing including the product itself, pricing, placement and
promotion are the four wheels of the vehicle on which the path of an
organization’s marketing success is actually dependent.
The services marketing mix adds 3 new elements of - people, process and physical evidence - which are unique to the marketing of services.
The marketing mix for a service has additional elements because the
characteristics of a service are different to the characteristics of a product
It create awareness of product in market
REFERENCES
Bibliography
Service Sector management
And marketing
Webliography
www.Scribe,com
www.Wikipedia.org
www.Google.com
www.ama.org